Elizabeth Velasco and her family started the new year in a new home of their own. The dream was made possible with the help of NeighborWorks Home Partners through a new loan product that offers mortgage-like financing for manufactured homes.
Velasco had rented a home with her family in Bloomington, Minnesota, for years. After a recent divorce, she started looking at homeownership options, including a sustainable manufactured home.
In the past, the interest rates on loans for manufactured homes would made this type of affordable housing seem unaffordable, especially if the manufactured home is on land that isn’t owned by the homeowner. In Minnesota, the best options for loans in this category have been “chattel loans,” which cover movable property, such as construction equipment. But the interest rates could often be double that of a traditional mortgage, said Erin Moran director of advancement at NeighborWorks Home Partners.
Prime Path Manufactured Home Loan, the new loan her organization has designed, treats manufactured
homes more like traditional, “stick-built” homes. That put homeownership for Velasco’s family within reach. Velasco, who works as an assistant teaching special needs students in a Minnesota middle school, was able to afford a four-bedroom manufactured home in Richfield.
“I wanted to buy my own home, but people had told me because of my income, I would not be able to,” she said. “When I heard about this program, it worked.”
Velasco and her two children, ages 18 and 11, moved into their home Dec. 30, ready for a new start for the new year. She is the first generation in her family to achieve homeownership. “I wanted something more stable for my kids and for myself, too,” she shared.
NeighborWorks Home Partners first started working on the loan product in 2023 to create a more sustainable path to homeownership. The Dec. 30 closing was their second using the product, but the first client who was willing to share their story publicly.
“We were able to open doors to a whole new group of people who wouldn’t have been homeowners otherwise,” Moran said. Velasco “was so happy at the closing! She said she’s wanted to live in this neighborhood for 12 year.”
Moran explained that along with charging higher interest rates, chattel loans were often shorter term. “We wanted to create something closer to average mortgage rate that could have an extended term up to 30 years.”
Working with partners including CoNorth and the City of Richfield, the NeighborWorks nonprofit found a way to do just that. The organization is also able to help with down payment assistance for people who will be living in a resident-owned community (ROC) like the one Velasco moved into. “It’s a super urban park in a first-tier suburb,” Moran said. “It’s tucked right behind the community center.” The homes in the park are all new, and are all net-zero ready.
“A lot of the people buying manufactured housing here are low- to moderate-income,” Moran said. “For them, it was not feasible to pay off a loan in 10 years at a high interest rate. That also prevented people from being able to invest in new units that were energy efficient and safe.”
New units also are built to last, she said. “We’re trying to help be part of the change that presents manufactured housing as someplace you can have as your forever home,” Moran said. “These new manufactured homes are holding their value much better than they have in the past.”
Sarah Kackar, director of NeighborWorks’ Rural Initiative, has been seeing increased attention to manufactured housing for just this reason. “We see programs that provide low-interest/long-term loans as an excellent solution that is needed across the country to move people into energy efficient, safe housing like much of today’s manufactured housing. This new program at NeighborWorks Home Partners will allow more low to moderate income buyers in Minnesota the chance to build equity for their families’ futures.”
Moran said placing manufactured homes during the winter can be harder because of the frozen ground, especially in Minnesota. She was glad they were able to get the property and home ready to be owner-occupied before the freeze.
Velasco and her family were also glad for the move-in date – a new year and a new start.
A number of partners were involved in the creation of the program, including CoNorth, who first approached NeighborWorks Home Partners because of the network organization’s experience with lending.
“We’re thrilled to see NeighborWorks Home Partners bring this new Prime Path loan to life,” said Victoria Clark West, executive director of CoNorth. “This program fills a critical financing gap for manufactured homeowners and strengthens the resilience of our resident-owned communities. This first loan closing isn’t just a win for one homeowner. It’s a breakthrough moment for the entire sector.”
